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Extradry Martini

Ok This Is Getting Very Bad Indeed

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The interest rate swap market is largest market both in terms of volume and outstanding contracts. Today, market makers are refusing to quote in some maturities. I spoke to a friend of mine this morning who is a senior economist at a major investment bank. He regularly meets with policy makers in the US. He tells me that they have completely run out of ideas and he is very worried indeed. In the meantime, the stock markets still believe that Fed rate cuts will save the day. They won’t. Rumours are circulating of a 75bp cut by the Fed immediately after the non-farm payrolls data at 1.30pm London time (an hour before the stock market opens). If this does happen, it is my belief that the inflexion point – i.e. when the stock market realises that Fed rate cuts will do nothing to help – will be today.

As I said in another thread, the US government needs to do something big and bold to stop this vicious circle, and they need to do it now, otherwise we are looking at a downturn as bad as 1930-34. Lets just hope something comes out of the G10 meeting this weekend.

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The interest rate swap market is largest market both in terms of volume and outstanding contracts. Today, market makers are refusing to quote in some maturities. I spoke to a friend of mine this morning who is a senior economist at a major investment bank. He regularly meets with policy makers in the US. He tells me that they have completely run out of ideas and he is very worried indeed. In the meantime, the stock markets still believe that Fed rate cuts will save the day. They won’t. Rumours are circulating of a 75bp cut by the Fed immediately after the non-farm payrolls data at 1.30pm London time (an hour before the stock market opens). If this does happen, it is my belief that the inflexion point – i.e. when the stock market realises that Fed rate cuts will do nothing to help – will be today.

As I said in another thread, the US government needs to do something big and bold to stop this vicious circle, and they need to do it now, otherwise we are looking at a downturn as bad as 1930-34. Lets just hope something comes out of the G10 meeting this weekend.

Sounds bad if this is true the Doller will be history if they cut another 0,75pc

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The interest rate swap market is largest market both in terms of volume and outstanding contracts. Today, market makers are refusing to quote in some maturities. I spoke to a friend of mine this morning who is a senior economist at a major investment bank. He regularly meets with policy makers in the US. He tells me that they have completely run out of ideas and he is very worried indeed. In the meantime, the stock markets still believe that Fed rate cuts will save the day. They won't. Rumours are circulating of a 75bp cut by the Fed immediately after the non-farm payrolls data at 1.30pm London time (an hour before the stock market opens). If this does happen, it is my belief that the inflexion point – i.e. when the stock market realises that Fed rate cuts will do nothing to help – will be today.

As I said in another thread, the US government needs to do something big and bold to stop this vicious circle, and they need to do it now, otherwise we are looking at a downturn as bad as 1930-34. Lets just hope something comes out of the G10 meeting this weekend.

Hmm..perhaps not the best day to buy the dollar ..eh? not that I would contemplate it myself.

I can imagine that 'safe havens' will be very popular today...

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As I said in another thread, the US government needs to do something big and bold to stop this vicious circle, and they need to do it now, otherwise we are looking at a downturn as bad as 1930-34. Lets just hope something comes out of the G10 meeting this weekend.

The situation is beyond the control of the US government now. Any intervention will just make the situation worse and more prolonged. I cannot see anything the G10 can do either that will change the laws of economics/nature. We are living in interesting times....

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The interest rate swap market is largest market both in terms of volume and outstanding contracts. Today, market makers are refusing to quote in some maturities. I spoke to a friend of mine this morning who is a senior economist at a major investment bank. He regularly meets with policy makers in the US. He tells me that they have completely run out of ideas and he is very worried indeed. In the meantime, the stock markets still believe that Fed rate cuts will save the day. They won’t. Rumours are circulating of a 75bp cut by the Fed immediately after the non-farm payrolls data at 1.30pm London time (an hour before the stock market opens). If this does happen, it is my belief that the inflexion point – i.e. when the stock market realises that Fed rate cuts will do nothing to help – will be today.

As I said in another thread, the US government needs to do something big and bold to stop this vicious circle, and they need to do it now, otherwise we are looking at a downturn as bad as 1930-34. Lets just hope something comes out of the G10 meeting this weekend.

They are talking fed rates at 1% and a 'Japan like scenario' (?deflation) in the US. One thing that I don`t hear mentioned is what would happen if ppl stop buying US govt debt due to low returns and falling confidence in the dollar? It would be armageddon if the US defaults on its debt..Any chance of that happening in the near future?

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They are talking fed rates at 1% and a 'Japan like scenario' (?deflation) in the US. One thing that I don`t hear mentioned is what would happen if ppl stop buying US govt debt due to low returns and falling confidence in the dollar? It would be armageddon if the US defaults on its debt..Any chance of that happening in the near future?

The dow futures on igindex are getting closer and closer to 12000. How big a psychological barrier is 12000? What about that combined with the 100 Yen to dollar barrier?

What if both broach?

Optobear

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This is really bad, I think the US is at the point of no return.

With all this negative news coming out, it gives me the feeling that this crash will be alot worse then the Wall street crash of 1929.

My main worry is that the UK is in a much worse state then the US and I am getting increasingly uneasy about how bad it will be here when the crash finally hits us.

Loz

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It would be armageddon if the US defaults on its debt..Any chance of that happening in the near future?

It wasn't armageddon when Russia defaulted in 1998. They had write offs and now 10 years later the country is in better financial shape. Defaulted or not both Russia and the US still are a nuclear superpower and can end life on this planet. A US default is not unthinkable.

PS. I hereby christen this thread, the new 'Black Friday' thread!

Edited by newbie

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It's going to be a bad day today. It just keeps getting worse.

-Swap spreads and 3M Libor widening over the past few days reflect restricted liquidity.

-Who would lend money to the US government at 1.42% when inflation is 4%? The dollar is already toast.

-Itraxx out past 600. Companies are going to find it a lot harder to fund current operations when the need arises.

-PoliTITians and central bankers who got us into this mess are looking for a "fix". It's like asking the the blind man who led you into the quicksand to lead you out again. Folly.

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It wasn't armageddon when Russia defaulted in 1998. They had write offs and now 10 years later the country is in better financial shape. Defaulted or not both Russia and the US still are a nuclear superpower and can end life on this planet. A US default is not unthinkable.

PS. I hereby christen this thread, the new 'Black Friday' thread!

The difference being that the US economy constitutes almost 25% of the world's GDP currently whilst Russia's GDP was around $ 500 bln in 1998..

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so the message here is buy gold?

I just have - another kg on BV - but it is evening here (Aus), and I am on my third large G&T - and listening to Peter Schiff's radio broadcast from wednesday in the background. I should get out more.

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It can't be that bad - BBC "Business" news is leading with the Tory tax hike plans for alcopops...

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The difference being that the US economy constitutes almost 25% of the world's GDP currently whilst Russia's GDP was around $ 500 bln in 1998..

So some rebalancing was due between the superpowers (as the relative $ figures were skewed did not reflect reality) and it's now happening.

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It can't be that bad - BBC "Business" news is leading with the Tory tax hike plans for alcopops...

That's because the Tories sent the BBC a press release. If HPC were to be a respected commentator in the BBC's eyes, then the BBC would report its press release as news.

p-o-p

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It would be armageddon if the US defaults on its debt..Any chance of that happening in the near future?

Not a chance.

You can't really default if you hold the reserve currency since you can create paper at will. What would happen is that US interest rates would skyrocket. Chaos would ensue, there is even a possibility gold might go down as a result.

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If they cut today, why would they do it after the jobs report and not before? Before would seem more measured, after would look like panic.

It doesn't much matter, a cut is a cut I guess, but the FED look like they are reactive not proactive when they do this. Same back in January. If they have decided to cut they should just get on with it.

They should get Trichet to go sort them out.

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If they cut today, why would they do it after the jobs report and not before? Before would seem more measured, after would look like panic.

It doesn't much matter, a cut is a cut I guess, but the FED look like they are reactive not proactive when they do this. Same back in January. If they have decided to cut they should just get on with it.

They should get Trichet to go sort them out.

the US markets always respond badly to poor job figures, particularly the creation of new jobs figs. :huh:

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Not a chance.

You can't really default if you hold the reserve currency since you can create paper at will. What would happen is that US interest rates would skyrocket. Chaos would ensue, there is even a possibility gold might go down as a result.

Let's face it. By letting their currency go to the dogs they ARE defaulting in all but name.

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Not a chance.

You can't really default if you hold the reserve currency since you can create paper at will. What would happen is that US interest rates would skyrocket. Chaos would ensue, there is even a possibility gold might go down as a result.

They are already doing that at present (cue: the $ 140 bln 'economic stimulus' package) but simply printing paper to service your debt would cause hyperinflation and ruin the economy and I honestly don`t believe the US Treasury is that reckless...I mean there must be some method to the madness..surely? :blink:

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They are already doing that at present (cue: the $ 140 bln 'economic stimulus' package) but simply printing paper to service your debt would cause hyperinflation and ruin the economy and I honestly don`t believe the US Treasury is that reckless...I mean there must be some method to the madness..surely? :blink:

I think it's called choosing the lesser of two evils for an over leaveraged

economy. Not to say they have got it right of course, but the alternative

to screwing all the people who lent you money or bought it and hold it in

SWFs is to become their slaves, working forever to pay off a debt that

cannot be properly serviced. All the while you get poorer and your ability

to wield economic and military might diminishes. As horrible as the prospect

is, better to stuff your currency and the people that hold it.

.

ST

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If the US consumer is forced to spend even more on oil products, how will that benefit the economy?

Atleast it`ll solve the country's obesity epidemic by finally persuading the b***rs to abandon their cars and start walking to work for a change :lol:

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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